Shin Kong Financial : SKFH announces terms and subscription record date of capital raising through issuance of preferred shares B (supplementary information)

SKFH announces terms and subscription record date of capital raising through issuance of preferred shares B (supplementary information)

2020-07-29

1.Date of the board of directors resolution or decision by the Company:2020/07/29

2.Number of shares issued:

222,000,000 shares of preferred shares B

3.Par Value per share:

NT$10 for preferred shares B

4.Total monetary value of the issuance:

NT$9,990,000,000 (supplementary information)

5.Issue price:

NT$45(supplementary information)

6.Number of shares subscribed for by employees:

33,300,000 shares of preferred shares B

7.Ratio of shares subscribed for by existing shareholders:

75% of the total number of newly issued shares, or 166,500,000 preferred shares B, are reserved for subscription by existing shareholders according to their respective holding as stated in shareholders' register book on the subscription record date.

Every 1,000 shares can be allocated with 12.74795124 preferred shares B.

8.Method for public sale and no. of shares:

10% of the total number of newly issued shares, or 22,200,000 of preferred shares B, are reserved for subscription by the public.

9.Handling method for fractional shares and shares unsubscribed for by the deadline:

Where a fractional percentage of the original shares being held by a shareholder is insufficient to subscribe for one new share, the fractional percentages of the original shares being held by several shareholders may be combined for joint subscription of one or more integral new shares or for subscription of new shares in the name of a single shareholder.

Fractional shares and shares left unsubscribed by original shareholders and employees may be open for subscription by specific person or persons through negotiation. The Chairman is authorized to handle the negotiation and settlement of the relevant matters.

10.Rights and obligations of these newly issued shares:

The rights and obligations of the Company's preferred shares B are as below:

(1)The dividend yield is set at 4.0% per annum('7-year IRS 0.68%+3.32%') on the issue price at record date for pricing. The 7-year IRS rate will be reset on the first business day following the seventh anniversary of the issuance date and every seven years thereafter.

The record date for pricing is one business day prior to the pricing date and the record date for reset is two business days prior to the interest rate reset date. The IRS rate is the arithmetic mean of 7-year IRS rates appearing on Reuters pages 'TAIFXIRS' and 'COSMOS3' at 11:00 a.m. (Taipei time) on the relevant record date. If such rate cannot be obtained, the company will determine the rate based on reasonable market price with good faith. (supplementary information)

(2)Cash dividends will be paid annually. Once the Company's audited financial statements have been recognized at the annual general meeting of the shareholders, the Board of Directors shall be authorized to set the payment date for the distribution of the payable preferred share dividends for the previous year. Dividend distributions in issuance and redemption years shall be calculated based on the actual number of days the preferred shares remained outstanding in that year.

(3)If the Company posts earnings in its final accounts, in accordance with applicable laws, it shall first be used for payment of tax obligations and making up of losses, then set aside as legal reserve and allocated or reversed to the special reserve fund.

The remaining earnings, if any, may first be used to distribute preferred share dividends of the year.

(4)The Company has sole discretion on the distribution of preferred share dividends. If no earnings are posted in the final accounts or earnings posted are insufficient to distribute preferred share dividends, or if

a preferred share dividend distribution will cause the Company's capital adequacy ratio to fall below the minimum requirement stipulated by the law or the competent authorities, or based on other necessary considerations, the Company may resolve not to distribute preferred share dividends without it being deemed as an event of default. The undistributed dividends or the deficit of dividends will not be accumulated for deferred payment in the subsequent years where there are earnings.

(5)Shareholders of preferred shares may not participate in the distribution of cash and stock dividends of the common shares derived from earnings or reserves.

(6)Preferred shareholders have priority over common shareholders for distribution of the Company's residual property. All preferred shareholders rank pari passu for repayment, but such is capped at the issuance price.

(7)Preferred shareholders have no right to vote or elect, but are entitled to be elected as directors at shareholders' meeting.

Preferred shareholders have the right to vote at preferred shareholders' meeting and at shareholders' meeting where items on the agenda would affect rights and obligations of preferred shareholders.

(8)Preferred shares may not be converted to common shares. Preferred shareholders have no right to request the Company to redeem the preferred shares they hold.

(9)Preferred shares have no maturity date, though the Company may redeem all or a part of the outstanding issued preferred shares at any time after seventh anniversary of the preferred shares issuance date. Unredeemed preferred shares continue to carry rights and obligations of the issuance conditions set forth under this article.

In the year of a redemption of preferred shares, if the Company resolves to distribute dividends, dividends to be distributed up to the redemption date shall be calculated by the actual number of days of the year issued and outstanding.

(10)Preferred shares have the same pre-emptive right as common shareholders for newly issued shares.

(11)Distributions of preferred share dividends shall be in the order in which the preferred shares are issued.

11.Utilization of the funds from the current capital increase:

To enhance capital adequacy ratios and reinvest in subsidiaries to support business development strategies of holding company and its subsidiaries.

12.Record date of cash capital increase and share subscription:2020/08/11

13.Last date before book closure:2020/08/06

14.Book closure starting date:2020/08/07

15.Book closure ending date:2020/08/11

16.Payment period:

(1)Payment period for existing shareholders and employees will be from 2020/08/12 to 2020/08/25

(2)Payment period for specific persons will be from 2020/08/26 to 2020/09/01, which can be extended further if needed.

17.Date of the agreement with the banks to collect and deposit the proceeds:

An announcement will be made after the agreement is officially signed.

18.Name of the institution designated to collect the proceeds:

An announcement will be made after the agreement is officially signed.

19.Name of the bank designated to deposit the proceeds:

An announcement will be made after the agreement is officially signed.

20.Any other matters that need to be specified:

(1)The capital raising was approved by the FSC, per document Jin-Guan-Zheng-Fa-Zi No.1090333706, dated March 20, 2020.

The company applied for a three-month extension of the offering period to complete the capital raising and the application was approved by the FSC, per document Jin-Guan-Zheng-Fa-Zi No.1090340810, dated April 28, 2020. Thus, the offering period has been extended to September 20,2020.

(2)The record date of capital raising is set to be 2020/09/01. If the record date needs to be changed, the chairman is authorized to make adjustments.

(3)Suspension of conversion of convertible bonds: 2020/7/17 to 2020/8/11